There is a strange reality unfolding across Africa. As “strange” as the many other realities that have rapidly evolved in the post-COVID world.
Millions of people are still earning salaries in naira, cedi, shilling, kwacha, or birr. They buy food in local markets, pay transport fares in local currency, and pay taxes in local currency.
There is nothing strange about that. It’s an everyday phenomenon. How else would people earn salaries? Where else would they buy food? Are they supposed to pay transport fares in foreign currency?
Obvious opening, but it’s better to start off with the familiar.
The “strange” reality is that despite the “domesticity” of these daily financial interactions, many of these people no longer save in local currency.
Instead, they save in dollars.
I am not talking about physical dollars hidden under mattresses or in safe boxes, or the ones stored away in domiciliary accounts at the bank.
They are saving in digital dollars, mostly USDT.
USDT was not announced by any government campaign, designed by any central bank, or even recommended by any international institution. Yet, its popularity continues to grow around the world.
It is the most used stablecoin and one of the most famous cryptocurrencies, besides Bitcoin.
From Lagos to Nairobi, Accra to Harare, a parallel financial system is emerging that is built on smartphones, crypto wallets, peer-to-peer exchanges, and stablecoins.
This may be one of the most important economic shifts happening in Africa today.
While most policymakers are still debating cryptocurrencies as speculative assets, Africans have moved beyond investing in stablecoins to using them as survival tools.
What Problem are Africans Trying to Solve?
To understand why stablecoins are spreading so quickly, one must first understand a simple fact.
Inflation changes how people think.
In countries with relatively stable currencies, saving money in a bank account makes sense. People expect their money to hold roughly the same value over time and even to accumulate additional value through interest along the way.
In many African economies, the case is reversed. Currencies can lose value rapidly.
Keeping money in naira, for example, is the same as holding ice in the sun.
A worker may save for six months only to discover that the money now buys less food, rent, fuel, or medicine than when it was earned.
Zimbabwe's repeated currency crises remain one of the world's most famous examples. But it is not only Zimbabwe.
Nigeria has experienced multiple sharp devaluations in recent years. Ghana's cedi experienced significant depreciation in 2022 and 2023. Egypt has undergone several currency adjustments. Similar pressures have appeared across numerous African economies. Inflation and exchange-rate volatility have become normal economic conditions for millions of households.
As is expected, when inflation becomes persistent, people naturally search for alternatives.
Over the years, physical U.S. dollars, gold and jewellery, real estate, livestock, informal savings groups, and foreign bank accounts to fight inflation.
Today, stablecoins have become the new wrestling champion against the never-ending string of inflation.
Why USDT Dominates Africa
Although other dollar-backed stablecoins such as USDC, FDUSD, and PYUSD exist, USDT, issued by Tether, has emerged as the undisputed leader in African crypto markets. In many peer-to-peer (P2P) communities, USDT has become so dominant that traders often use the words "dollar" and "USDT" interchangeably.
The following are reasons USDT has succeeded in Africa.
USDT Is Available Everywhere:
The first reason for USDT's dominance is its simple availability.
Network effects matter in finance. That is why fintechs spend millions on influencer marketing. People use money that others have already used. No one wants to be scapegoated.
USDT is listed on virtually every major cryptocurrency exchange operating in Africa, including Binance, Obiex, Bybit, OKX, KuCoin, Bitget, and numerous local exchanges. It is also deeply embedded in informal P2P trading communities operating on Telegram, WhatsApp, and other messaging platforms.
As a result, finding a buyer or seller is usually easy.
This matters far more than many observers realise.
Imagine a Nigerian freelancer who receives payment from a client in Canada. If that freelancer wants to convert stablecoins into naira, the process must be quick. Holding an asset that few people trade can create conflicts. But because thousands of buyers and sellers are continuously trading USDT, users can typically convert their holdings into local currency within minutes.
Liquidity (the ease with which an asset can be bought or sold) is often overlooked in discussions about crypto adoption. Yet liquidity is precisely why USDT became established. Once a critical mass of users adopted it, everyone else followed.
Today, in many African markets, USDT enjoys a self-boosting advantage. People use USDT because everyone else already uses USDT.
It Functions as a Digital Dollar Account:
For millions of Africans, obtaining and maintaining access to physical U.S. dollars is a frustrating process they do not want to deal with.
In several countries, opening a foreign currency account requires documentation, minimum deposits, or regular interactions with formal banking institutions. Access to cash dollars can also be restricted during periods of foreign exchange shortages.
Nigeria provides a clear example here. Following repeated foreign exchange crises and currency reforms, obtaining dollars through official banking channels has often become difficult for ordinary citizens and small businesses. Similar restrictions exist, to varying degrees, in countries such as Ethiopia, Egypt, Zimbabwe, and Ghana.
USDT offers a workaround for this because in 2026 a university student, trader, small business owner, or remote worker can purchase digital dollars directly from another individual without visiting a bank branch or opening a domiciliary account.
Within this digital economy, smartphones have become informal dollar banks.
USDT Protects Savings Against Currency Depreciation:
It is obvious at this point that Africa's stablecoin story cannot be separated from inflation.
Many of the continent's largest economies have experienced prolonged periods of currency depreciation over the past decade.
The Nigerian naira has undergone multiple devaluations, particularly since the liberalisation of foreign exchange markets in 2023. Ghana's cedi was among the world's worst-performing currencies in 2022, while countries such as Zimbabwe, Sudan, and Ethiopia have faced even more severe monetary instability.
For households living in these economies, the challenge will naturally be about how to preserve purchasing power.
Traditional savings accounts often fail to provide an adequate answer in cases like this. Interest rates on bank deposits frequently lag inflation, meaning savers lose real value over time.
Amidst all this, USDT has increasingly become a grassroots inflation hedge.
In Western markets, stablecoins are often viewed primarily as infrastructure for crypto trading. In Africa, they are being used as a savings technology.
This distinction alone explains why adoption remains strong in Africa even during broader cryptocurrency market downturns. People continue buying USDT regardless of whether Bitcoin is rising or falling because their primary concern is currency preservation, not price speculation.
Cross-Border Trade Has Made USDT Indispensable:
USDT's growth has also been driven by African businesses engaged in international trade.
Even in the glorified, digitally charged year of 2026, cross-border commerce within Africa remains expensive and fragmented. The World Bank and other international institutions have repeatedly noted that African payment systems remain among the costliest and least integrated globally.
A small importer in Kenya purchasing goods from suppliers in China could face multiple obstacles, such as limited access to dollars, high bank charges, lengthy settlement periods, and foreign exchange restrictions, all within a single deal.
USDT offers an alternative settlement layer for challenges like this.
Merchants can buy USDT locally, transfer it almost instantly across borders, and settle invoices without relying entirely on correspondent banking networks.
According to regional trade experts, an increasing number of informal and semi-formal traders across the Common Market for Eastern and Southern Africa (COMESA) region are already using digital payment alternatives, including stablecoins, to bypass chronic hard-currency shortages and reduce transaction costs.
USDT Fits Naturally Into Africa's Expanding Digital Workforce:
Africa is experiencing rapid growth in remote work, freelancing, digital entrepreneurship, and online service exports. Thousands of African software developers, designers, writers, marketers, virtual assistants, and consultants now work for clients based in North America, Europe, and Asia.
In the midst of this development, however, receiving payments remained a persistent challenge.
Traditional international payment channels often involve high fees, delays, or limited availability. In some countries, global payment platforms operate only partially or impose significant restrictions.
Stablecoins have emerged as an efficient alternative.
A freelancer in Nairobi can receive payment in USDT within minutes. A software developer in Lagos can invoice clients in digital dollars and avoid exchange-rate uncertainty. An online merchant in Accra can receive international payments without maintaining a foreign bank account.
For a generation that already lives online, earning and saving in digital dollars is a natural pivot.
Finally, Trust Has Become a Competitive Advantage:
Perhaps surprisingly, many African users simply trust USDT because it has consistently worked for them.
Trust in financial systems is often built through experience rather than regulation.
Users have watched USDT facilitate payments, preserve value, and enable trade for years. Friends recommend it to friends. Traders teach newcomers how to use it. Entire online communities have formed around it.
This social trust matters enormously.
People are far more likely to adopt a financial tool that their neighbours, colleagues, relatives, and business partners already use successfully.
In that sense, USDT's dominance in Africa resembles the early growth of mobile money services such as M-Pesa, whose adoption expanded because ordinary people found it useful.
And once a financial technology becomes useful enough, widespread adoption tends to follow.
Peer-To-Peer Markets: Africa's Foreign Exchange Desks
USDT may be the currency of Africa's emerging digital dollar economy, but peer-to-peer (P2P) markets are the infrastructure that keeps the system running.
Without P2P trading, stablecoin adoption across much of Africa would likely remain limited to a relatively small group of crypto enthusiasts. Instead, P2P platforms have transformed digital dollars into something far more significant, an alternative foreign exchange network operating largely outside traditional banking channels.
P2P markets allow individuals to buy and sell stablecoins directly with one another. A buyer transfers local currency through a bank transfer, mobile money service, or other payment method, while the seller releases the agreed amount of USDT. The exchange platform typically acts as an escrow intermediary, temporarily holding the stablecoins until both sides complete the transaction.
Through P2P, a clothing merchant in Lagos can purchase USDT from another trader within minutes, convert those funds into payments for a supplier abroad, and complete a transaction that might otherwise have taken days through conventional banking channels. A university student in Accra paying tuition overseas can source digital dollars directly from a local P2P marketplace instead of navigating scarce foreign exchange supplies. A family in Nairobi receiving financial support from relatives abroad can access funds almost immediately rather than waiting for traditional settlement processes.
In effect, thousands of individual traders have collectively created a decentralised foreign exchange market.
Unlike conventional forex markets, there is no central trading floor, no official opening and closing hours, and no single institution controlling access. Trading takes place continuously, day and night, through exchanges, messaging groups, online communities, and increasingly sophisticated local networks.
This has given rise to a new class of market participants called “informal digital forex dealers”.
In cities across the continent, some individuals now specialise in providing liquidity to local P2P markets. Much like traditional bureau de change operators, these traders continuously buy and sell digital dollars, profiting from spreads between purchase and selling prices. Many maintain extensive networks of customers ranging from freelancers and importers to small businesses and everyday savers.
Prior to restrictions on formal crypto services in several jurisdictions, African countries regularly ranked among the world's largest P2P crypto markets. Nigeria, in particular, consistently appeared near the top of global P2P trading volumes, reflecting both strong demand for dollar exposure and the adaptability of informal financial networks.
Regulatory restrictions, banking limitations, and exchange suspensions have certainly altered how P2P markets operate, but they have rarely eliminated demand. Instead, trading activity has repeatedly migrated, from formal exchanges to informal networks, from one platform to another, and from public channels to private communities. The technology may have changed, but the underlying demand for accessible digital dollars remains.
In many ways, Africa's P2P stablecoin markets now perform functions traditionally associated with banks, money transfer operators, and foreign exchange bureaus. The difference is that these new foreign exchange desks fit inside a smartphone.
There is an irony in all this, though.
Africa May Be Becoming More Dollarised While Trying To Reduce Dependence On The Dollar
Across the continent, policymakers have spent years discussing de-dollarisation, that is, reducing the role of the U.S. dollar in trade, payments, and foreign reserves, citing that heavy reliance on the dollar exposes African economies to external shocks, exchange-rate volatility, and shortages of hard currency.
According to the African Export-Import Bank (Afreximbank), roughly 80% of intra-African payments have historically been routed through correspondent banks outside the continent, adding an estimated $5 billion annually in transaction costs. It is partly for this reason that institutions such as the African Union, Afreximbank, and regional economic blocs have invested heavily in creating alternative payment infrastructure.
Perhaps the most ambitious of these efforts is the Pan-African Payment and Settlement System (PAPSS), launched by Afreximbank in partnership with the African Union. PAPSS was designed to allow businesses in different African countries to trade directly in their local currencies without first converting into U.S. dollars.
Regional payment systems like PAPSS represent an important step toward greater financial sovereignty. They aim to make intra-African trade cheaper, faster, and less dependent on external financial infrastructure.
Yet, at the same moment that governments are building these systems, households and businesses are increasingly adopting dollar-denominated stablecoins.
This is the irony of it all.
“Official Africa” is pursuing de-dollarisation, while unofficial Africa is embracing digital dollarisation.
But we can’t blame the citizens because they are responding to immediate financial realities.
If local currencies are volatile, inflation is high, access to foreign exchange is uncertain, and cross-border payments remain expensive, people naturally gravitate toward alternatives that are more stable and accessible.
Citizens are unlikely to abandon digital dollars unless domestic currencies consistently provide the stability, predictability, and trust people seek in the first place.
What About Central Bank Digital Currencies?
If private stablecoins are rapidly gaining traction across Africa, where do Central Bank Digital Currencies (CBDCs) fit into this picture?
Over the past few years, many African central banks have explored CBDCs as part of broader efforts to modernise payment systems, deepen financial inclusion, and prepare for an increasingly digital economy.
CBDCs are essentially digital versions of a country's official currency issued and backed by its central bank. Unlike cryptocurrencies such as Bitcoin or privately issued stablecoins such as USDT, CBDCs represent “sovereign money”. One digital naira, digital cedi, or digital rand would carry the same legal status as its physical equivalent.
Globally, more than 130 countries are now exploring or developing CBDCs in some form, and Africa has been an active participant in this trend.
Nigeria became the first African country (and one of the first countries in the world) to launch a retail CBDC when it introduced the eNaira in October 2021. Other countries, including Ghana, South Africa, Kenya, Rwanda, and several members of the East African Community, have conducted pilots, research programmes, or feasibility studies.
Many have argued that CBDCs could reduce payment costs, improve financial inclusion, facilitate government transfers, strengthen tax collection, and provide a secure digital payment infrastructure under public oversight. They could also help central banks maintain relevance in a financial system increasingly shaped by private digital currencies.
However, the experience so far has been mixed.
Despite being an early pioneer, Nigeria's eNaira has struggled to achieve widespread public adoption. Although millions of wallets have reportedly been created, actual usage remains relatively low compared with mobile money platforms and private stablecoins.
Why, you may ask.
First, many users simply do not perceive a sufficiently strong reason to switch.
A successful payment technology must solve a pressing problem better than existing alternatives. For many users, the eNaira did not offer a compelling advantage over bank transfers, mobile money services, or stablecoins.
Second, there is the trust factor.
Stablecoin users often value the ability to hold assets linked to the U.S. dollar. A CBDC denominated in a local currency does not address concerns about inflation or currency depreciation. If an individual's primary objective is preserving savings against local currency weakness, a digital version of that same currency may not appear especially attractive.
Third, users expect payment systems to work across borders.
One reason stablecoins have gained popularity is their global interoperability. Most CBDCs, by contrast, are currently designed primarily for domestic use.
This does not mean CBDCs are destined to fail.
Far from it.
CBDCs could still play an important role in improving domestic payments, expanding financial access, digitising government services, and reducing transaction costs within national economies. Cross-border interoperability initiatives among central banks could also make CBDCs more competitive internationally.
But the early experience from Africa suggests that people adopt financial technologies because they solve immediate problems, not because governments introduce them.
Stablecoins have spread rapidly because they address several needs simultaneously, including access to dollar-denominated value, faster settlement, cross-border functionality, and savings protection.
For CBDCs to compete effectively, they may need to offer similarly compelling advantages.
So, where does this go next?
The most likely outcome is that stablecoins will become even more deeply embedded in Africa's financial system.
The economic conditions driving adoption (high inflation, currency volatility, expensive cross-border payments, and limited access to foreign exchange) are unlikely to disappear anytime soon. As long as these challenges continue, demand for digital dollars will remain strong.
At the same time, regulators across the continent will intensify efforts to oversee the sector rather than ignore it. Expect clearer rules around licensing, compliance, taxation, and consumer protection as governments attempt to bring stablecoin activity into formal financial systems.
Traditional financial institutions are also likely to adapt to this economy. Banks, fintech companies, and payment providers are increasingly exploring ways to integrate stablecoin infrastructure into their existing services instead of competing against it.
The gospel from the mouth of Prophet Jeremiah is that Africa's digital dollar economy is moving from the margins to the mainstream. From the periphery to the centre-stage.
How governments and institutions will respond to their growing influence is what we are all “sat” for.
[Cue me the Avengers theme song]